Court mandates a timeline for the bank to decide on the bankruptcy settlement proposal, keeping dispossession in abeyance.

BASANT BALAJI J ======================

W.P. (C) No. 2590 of 2026 ========================

Dated 24^th day of February 2026 JUDGMENT The writ petition has been filed challenging Ext.P3 notice issued by the Advocate Commissioner for taking physical possession of the secured asset and seeking a direction to the respondents to consider and include the petitioner’s request under the “Nava Keraleeyam” Amnesty Scheme and to permit the petitioner to avail the benefit of the One Time Settlement scheme.

2. The learned counsel for the respondent Bank made available a letter dated 06.02.2026, wherein the Bank has stated that the request of the petitioner for settlement under the One Time Settlement Scheme, in terms of the “Nava Keraleeyam” Amnesty Scheme, cannot be considered and the petitioner has been called upon to appear for a discussion regarding a compromise settlement on or before 15.02.2026.

3. The learned counsel for the petitioner submits that, pursuant to the letter issued by the respondent Bank, the petitioner appeared before the Bank on 13.02.2026 for a discussion and offered a sum of Rs. 1.5 crores towards full and final settlement of the loan account. However, thereafter, the respondent Bank has not communicated any decision on the said request. 4. The learned counsel for the respondent Bank submits that the Bank is not agreeable to accept a sum of Rs. 1.5 crores towards settlement, particularly, when the outstanding amount is more than Rs. 2.91 crores. 5. The learned counsel for the petitioner submits that a fresh proposal will be submitted within two days from today, specifying the amount under which the petitioner seeks to avail the benefit of the One Time Settlement Scheme or any compromise/settlement scheme as proposed by the respondent Bank.

6. If such a proposal is submitted within the aforesaid period, the respondent Bank shall consider the same, including under any scheme proposed by the Bank, and communicate its decision within one week thereafter. The amount of Rs. 15,00,000/- already deposited pursuant to the interim order passed by this Court on 30.01.2026 shall be treated as an upfront amount for the purpose of considering the One Time Settlement/compromise proposal.

7. In view of the direction issued by this Court to the respondent Bank to take a decision on the One Time Settlement/compromise proposal within one week, dispossession of the petitioner shall be kept in abeyance for a period of one week or until the decision is communicated to the petitioner.

The writ petition is disposed of as above.

Sd/-